Have you retried rotating the digital crown to turn off water mode again?
The watch is not waterproof, it is water-resistant, could you have subjected the watch to something that harmed the watch's water-resistant state? Dropped the watch? Subjected it to harsh chemicals that could eat away at the watch's seals?
About Apple Watch water resistance -
https://support.apple.com/en-us/HT205000
M1 Mac mini, macOS 11.4; Watch, series 5 GPS/cellular, watchOS 7.5; iPad Pro 2nd Gen, iPadOS 14.6; iPad Air 2, iPadOS 14.6; iPhone 12 Pro, iOS 14.6; TV 4th Gen, tvOS 14.6 HomePods, audioOS 14.6 and Airport Express w/ Airplay 2